Kenwood 2003 Annual Report Download - page 5

03
KENWOOD Corporation Annual Report 2003
dramatically, the home electronics business improving
its financial structure and the wireless radio business
posting a solid performance. Moreover, various
revitalization measures and effects from a cost structure
overhaul contributed to pushing up operating income.
Ordinary income soared 570% to 7.1 billion yen, an
improvement of 6 billion yen from the previous fiscal
year.
Net balance achieved a "V-shaped" recovery, posting
a record net income of 4.2 billion yen (an improvement
of 30.9 billion yen from the previous fiscal year) — a
turnaround from the third consecutive year of
substantial deficit — despite the booking of valuation
losses on investment securities and losses from
disposal of fixed assets related to the consolidation of
overseas production subsidiaries. The figure marked
the first record in 14 years, exceeding the previous
record 4.1 billion yen posted in the fiscal year ended
November 1989 (the fiscal year shifted to end in March
from 1990).
Taking advantage of the results of fiscal year as a
springboard, the Company has decided to switch its
business strategy from reconstruction to rebirth and a
new leap forward. On March 2003, it established the
Production Reform Headquarter with sharply reducing
costs and inventories. In May 2003, it mapped out the
Mid-term Business Plan — 'Excellent Kenwood Plan', a
mid-term business plan to last from fiscal 2003 to 2005
(April 2003 to March 2006).
The 'Excellent Kenwood Plan' aims to make
Kenwood a company of global excellence in our core
business domains in the three-year period under its
vision "Creating Exciting through Surprising Ideas" by
maximizing shareholder value. For this, we aim at
achieving an operating income margin of 10% and
return on equity (ROE) of 20%, resuming dividend
payments and implementing zero net-debt business
management. By allocating 3-5 billion yen to be earned
as a result of manufacturing innovation efforts, we will
reinvest in developing attractive and competitive
products, strengthening the brand name and sharing
profits among the employees, in order to dramatically
improve competitiveness and profitability, while
enhancing our core competence — audio and
communications technologies — to the greatest extent.
The Company will regain its original brand image of
Innovation and Intelligence, and make its presence the
strongest as the world's leader in the field of Mobile &
Home Multimedia Systems, which is expected to be the
most promising business in the 21st century.
We humbly ask for your continued support of
Kenwood.
Haruo Kawahara, President & CEO